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Technology Stocks : CRUS, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: David B. Higgs who wrote (5817)	5/10/1998 11:58:00 PM
From: DJBEINO	Respond to of 8193

Cirrus Electronic Buyers News by Jennifer L. Baljko Having survived a major restructuring last year, Cirrus Logic Inc. is now warding off reports that it may be taken over by its largest investor. Several news reports last week indicated that Alfred Teo, who holds a 9.4% stake in the Fremont, Calif., chip maker, with about 6.4 million shares, may buy the company and take it private. But even if Teo intends to beef up his position, a poison-pill defense mechanism adopted last week will make it difficult-and more expensive-for such an attempt to occur, observers said. While Teo could not be reached for comment, the private investor and executive at several plastics companies is a "long-term-value shareholder" who buys undervalued stocks to boost his portfolio, said Bonnie McBride, Cirrus' director of investor relations. Teo had not previously voiced any plans to acquire Cirrus, McBride added. Although McBride said a meeting with Teo has been scheduled, she stressed that the poison pill does not reflect any action on his part to take control of Cirrus. "The poison pill is something companies of Cirrus' size often put in place," she said. Under the poison-pill mechanism, investors may buy $120 worth of common stock for $60 if anyone obtains more than a 15% stake in the company. By discounting the price, an investor will have a harder time pursuing a hostile takeover, explained analyst Charles Boucher of Donaldson Lufkin & Jenrette Securities, San Francisco. "If he makes a tender offer to other shareholders, this would make life unpleasant for him," Boucher said. Teo's wife, Annie Teo, who jointly owns a majority of the shares, said a takeover seems unlikely. "My husband has never taken over a company, and he's been in a position where he could have done that before," she said. Cirrus recently underwent a major reorganization involving layoffs, product consolidation, and a re-emphasis on core competencies. After two years of losses, the company posted net income of $36.5 million on sales of $954.3 million in fiscal 1998. The reports sparked activity on Wall Street last week, pushing Cirrus' stock price 10% higher. For the past several months, Cirrus stock has been trading at roughly $10, a 40% drop from a 52-week high of $17.75 in September.

To: David B. Higgs who wrote (5817)	5/11/1998 2:33:00 AM
From: cbstock	Read Replies (2) \| Respond to of 8193

Hi David, A lot of the company takeover strategy is a mind game. Many folks give the senior mgnt of any company more credit than they deserve and over estimate their sources of info. It seem that TEO, because he has been an investor in undervalued companies before, and runs several others understands a lot about psychology. The management of CRUS are hearing this at the same time we are also there are a lot of SEC rules about insider knowledge and trading. These guys running CRUS are a bunch of engineers and think like engineers (I am one too)retired and we are very rigid in our thinking. Good for engineering but bad for business!! I believe as a business man TEO is using the press and even some of us to publicly pressure the senior management to really get serious about this company. Teo doesn't need to own the shares in a proxy fight. He is setting the stage to have many of the MF and institutions that own stock, vote their shares with him and not with Hac and Co. How many of us would go with him???? I sure would throw my small 1K shrs in the pot. ...Anyway, it is fun to discuss and see if we are right. REgards cb